Preliminary investigations of some species of the genus Cytospora, fungi which belong to the form class Derteromycetes, afforded two novel and potent antibiotics, Grahamimycins A and B. Because of these initial findings, a thorough, multidisciplinary study of the morphology, anatomy, chemotaxonomy, chemical structures and configurations of genus Cytospora and its novel antimicrobial metabolites is proposed. This research will combine the sppcific expertise of a natural products chemist with that of a plant physiologist in a collaborative effort to investigate the growth, isolation, characterization, structure and biological activity of these heretofore relatively unstudied organisms and their metabolites. In addition to the biological aspects of these fungi relating to the production of antimicrobial materials, and chemical work involving high performance liquid chromatography to fractionate the complex mixture of metabolic products; this study will also include extensive biological testing of both cultures and purified metabolites with emphasis on examining their potential as novel antibiotic agents effective against pathogenic organisms. Although there are certain structural similarities with Erythromycin and other macrolides our chemical structure studies have shown that the novel Grahamimycins are a unique new class of macrodiolide antibiotics which have the potential of becoming as important as the penicillins due to their broad activity spectrum and extremely low toxicity. Our preliminary tests indicate strong in vivo activity against Staphylococcus aureus in mice as well as in vitro activity against nearly forty gram-negative bacteria, gram-positive, blue-green algae, and yeasts.